INSTANT VIEW: Thai court says ruling parties must disband

BANGKOK (Reuters) - Thai judges ordered that Prime Minister Somchai Wongsawat's People Power Party and two other parties in the ruling coalition should be disbanded on Tuesday after they were found guilty of electoral fraud.

The Constitutional Court also barred the parties' leaders, including Somchai, from politics for five years. He and many of his ministers will have to step down.

The stock market, which had been lower earlier, turned round as some investors took the view that this was a step toward resolving Thailand's damaging political crisis. The thai baht edged higher for the same reason. Analysts were skeptical.

The main index was up 0.09 percent at the midsession break.

The baht traded around 35.65/70 per dollar after the verdict after hitting 35.80 earlier, its lowest level since February 2007.

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HARRY BUNYARAKSH, COUNTRY HEAD, CLSA SECURITIES

"It is definitely something but any rise will be short-lived. It's not really the end and we all know it.

"People who trade in this market are mostly locals and really the disbanding issue is not going to outweigh bigger factors like the economic slowdown."

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KONGKIAT OPASWONGKARN, CEO, ASIA PLUS SECURITIES

"We all knew already it was going to come out this way. It's what people have expected. They disbanded the party ... but let me ask you this: does this guarantee anything? The future of Thailand is still very unclear and gloomy.

"Can anyone guarantee that both airports will reopen? We're going downhill. The whole country."

"You seize the airports and keep the country hostage? What kind of a protest is this?"

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NUCHJARIN PANARODE, ECONOMIST, CAPITAL NOMURA SECURITIES

"It's positive short-term as the government term has ended and the (extra-parliamentary, anti-government) PAD may stop its protest. But in the longer term, there is still uncertainty as we need to wait for a new government and see its policies.

"If the same party comes back, the PAD may come back again. If the (opposition) Democrats are elected, it may be a little bit positive as the PAD may stop its rally, but we'll have other protests from the group opposed to it."

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PICHAI LERTSUPONGKIJ, SENIOR VP AT THANACHART SECURITIES

"Possibly, the current coalition government parties will try to gather again to set up a new government. If they do, this won't help to solve the political deadlock.

"Now people are talking about the establishment of a national government ... and this might be the way out of the trouble."

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THANAWAT PATCHIMKUL, EXECUTIVE DIRECTOR, SEAMICO SECURITIES

"The verdict is in line with market expectations. It should help boost market sentiment in the short term. But in the longer term, disbanding the PPP party is not an absolute answer to solve the political crisis.

"We have to monitor how the situation develops. At this moment, Thai people are divided into several groups -- it will be difficult to get an absolute solution now."

(Reporting by Arada Therdthammakun, Ploy Chitsomboon, Khettiya Jittapong and Orathai Sriring; Editing by Alan Raybould)